April 16, 2017
Comprehensive Fiscal Plan Passes the House
Friends and Neighbors,

On this 90th Day of the Legislative Session, I am pleased to report that the Alaska House Majority Coalition has passed all four pillars of our comprehensive, sustainable and fair fiscal plan for Alaska. The tough votes I have made over the last month were not easy to make but I strongly be believe that they are necessary to protect Alaska’s future.

A Little History

A dramatic decline in both oil prices and oil production has created a huge fiscal gap which we have reduced through significant budget cuts in recent years, but which cannot be closed through budget cuts alone.

This is not the first time we have been here. We had historic low oil prices in the late 1980’s—bottoming out at less than $10 per barrel—and once again in the late 1990’s and early 2000’s oil prices were again less than $10 per barrel. Each time oil prices crash, we have had budget emergencies which made it difficult to deliver on our constitutional obligations to provide public safety and public education for Alaskans. 

Here we are again in 2017, with low oil prices and low oil production creating a perfect storm again that Alaska has been struggling to weather for the last three years. The legislature has used savings to cover the deficit for these past several years, but Alaska’s piggy-bank is nearly empty.

Voters throughout District 16 have been clear with me—you want a sustainable, comprehensive and fair fiscal plan so we can get off the volatile roller coaster of an oil-taxes-only budget. 

We have worked hard to come up with just such a plan as follows:
  1. HB 57: This operating budget includes sensible cuts of $85 million while funding the programs most needed for rural Alaskans including education, healthcare, public safety (including VPSOs), public broadcasting and the University of Alaska. These  modest cuts follow years of more dramatic cuts and nearly total elimination of a capital budget.

  2. HB 111: Ensure oil companies pay their fair share and helps avoid dangerous cuts other vital services by ending cash payments to the oil industry and reducing the effective tax rate to 25% .

  3. HB 115: Implements a modest progressive income tax which ensures that all workers in Alaska, including non-residents, are contributing to Alaska’s fiscal sustainability. This bill makes sure Alaskans contribute with equity.

  4. SB 26: Restructures the Permanent Fund to provide a dividend of $1250 or more and provides stable funding for public services. Changes made to this bill in the House ensures the PFD will not be cut unless the fiscal solutions in HB 111 and HB 115 are passed.

The House of Representatives has now sent over a complete fiscal plan to the Senate for their consideration. I know that they appreciate the gravity of our fiscal situation and hope that they will give our fiscal plan the serious consideration it deserves. Perhaps they will have new ideas that we should consider as well.

Over the next few weeks, I will continue to work towards a comprehensive, sustainable and fair fiscal plan for Alaska. Is this easy to do? No, it is not, but leadership isn’t about easy. It is about doing what is right for the people of Alaska—not just for one group of Alaskans or for just a few years—it is about doing the fairest thing for all current and future generations of Alaskans.

The House’s fiscal plan ensures that Alaska can have a strong and stable future which attracts business investment and continues to be a place where people want to live, work and raise a family. We are all in this together, and I understand the sacrifice that is being asked of every Alaskan.  Thank you for the trust you have placed in me to make these tough decisions--please continue to stay in touch.